Editor:Tsutomu Uwagawa
Address:Rodo-Soken,Union Corp 3-3-1 Takinogawa,Kitaku,Tokyo,Japan(114)
Tel:03(3940)0523 Fax:03(5567)2968

Rodo-Soken's Study Activity for the Early Part
of the 21st Century

By Kazuyuki Kusajima

      Japan Research Institute of Labour Movement (Rodo-Soken) was established in December 1989, to "carry out in close cooperation with Zenroren (National Confederation of Trade Unions) research, study and policy-making that effectively promote the development of the workers' movement. Rodo-Soken celebrated the 10th anniversary of its founding together with Zenroren, which was founded a month before it.

      In the final decade of the 20th Century following the inauguration of Rodo-Soken and Zenroren, the world has seen the collapse of the "Soviet-type of social system," the outrage of U.S. strategy of military and economic hegemonism and economic globalization, the prolonged economic recession suffered by Japan in subordination to the U.S., the economic crisis facing Asian countries, and the failure of the argument of "long live capitalism." And now we are entering the era of further upheavals.

      In its general meeting held in July 2000, Rodo-Soken examined its 10-year activities, analyzed the characteristics of the situation at the start of the 21st century, and defined study themes. The following is the summary of the discussion.

      There are bellwethers featuring the situation at the initial stage of the 21st Century.

      First, the Liberal Democratic Party and the government are pushing ahead with unprecedented massive dismissals. The background to this is enormous "excess facilities" and "excess liabilities," which are the result of their own bad politics. Instead of taking responsibility for settling these excesses, they have launched a major attack against workers, using an ideology that "Japan's economy will not come to life again" unless "three excesses, that is, the above-mentioned two excesses plus "excess employment" are cleared off. Japan's present level of unemployment, the worst-ever in post-war period, is likely to exacerbate further both in number and rate.

      Second, the root cause of "rationalization" attacks through massive dismissals facing Japanese workers is the industrial reorganization including M & A (merger and acquisition) carried out on a global scale under the initiative of U.S. mega-monopolies.

      Third, under such a global-scaled industrial reorganization, corporations are massively dismissing workers as a means of "rationalization." Given an all-out legal and political support, including the adverse revision of the Labor Standards Law and financial and fiscal measures to help them carry out "rationalization," major companies are reaping the biggest-ever profits.

      Fourth, in carrying out massive dismissals in their "rationalization" attacks under the "deregulation" policy, corporations stand on the view that the globalized economy under U.S. control is best because market principles can solve it all. These attacks have not only resulted in a great number of unemployment, but also had a destructive impact on small- and medium-sized businesses as well as agriculture, fishery, retailers, distributors, and service industry.

      Fifth, during the 1990s, the Japanese government forced through wholesale adverse revision of the medical care and pension systems, along with the increase of the consumption tax rate. It also adopted a zero interest rate policy to support major corporations. Such an overall attack of plunder and exploitation against workers and people has caused a decline in the people's purchasing power, a mainstay of the Japanese economy, undermining the basic conditions for reconstructing the nation's economy.

      Sixth, the issuing of 7 trillion yens of deficit-covering bonds in order to ensure the profits of large corporations, big financial capitals and general contractors, while helping them to clean up their bad loans and excess capital has led to fiscal failure of national and local governments. @Consequently, the Japanese people are imposed to pay 5.8 million yen per capita as tax. This will make the people's livelihood even more difficult as they enter the 21st century.

      Seventh, the protracted reign of LDP-led conservative politics with priority given to subordination to the United States and to the interests of big businesses is now at a compete deadlock, regarding military, political, and economic policies. Contradictions between the government, major corporations and big businesses on one hand, and all strata of the Japanese people centered on the working class on the other, are intensifying and expanding even further. Under the LDP government led by Prime Minister Mori Yoshiro's conservative coalition cabinet, with its support rate dropped to the level of 10%, there is no perspective for the economy and falling stock prices to bottom out. Even the leading figures of the business world have started to demand a change of regime as the only way out of the present situation.

      To resolve these contradictions through reactionary measures, the LDP-led conservative coalition government carried out what they call "reorganization of central ministries and agencies" to give more concentrated power to the Cabinet Office, so that the government can directly serve the U.S. world strategy and the interests of Japan's business circles. The new government structure started on January 6, 2001. The LDP-led conservative coalition's attempts to make Japan a reactionary state will not only run counter to Japan's Constitution, undermining peace, freedom, democracy and people's livelihood, but also create distrust and antagonism among Asian countries and peoples.

      From the analysis mentioned above on the situation at the start of the 21st century, Rodo-Soken has defined study themes. Rodo-Soken works to carry out investigation and study that can contribute to promoting reform and reconstruction of Japanese society combined with the further development of the Kakushinkon (National Forum for Peace, Democracy and Progressive Unity) movement and the class-based labor movement led by Zenroren. For this, Rodo-Soken considers particularly important as basic points that should be shared by study team members in their work to: 1) understand workers' conditions systematically and thoroughly; and 2) make an overall analysis of the systematic way of big businesses in pursuit of restructuring of conditions for capital accumulation and for further exploitation.

      While studying on the change in the way of capital accumulation by international monopoly corporations, Rodo-Soken will work on other themes of great importance, including the developments of workers' movement and people's struggles abroad, and the actual conditions of workers and peoples in Europe, North and South America, Asia and Africa.

      Based on its understanding of the situation in the early stage of the 21st century, Rodo-Soken will work to improve the qualitative level of its investigation, study and policy-making activities that can effectively contribute to the development of the Zenroren movement. It also aims to receive a higher social estimation as an investigation body. To achieve these goals, it set up 11 study teams working on such themes as employment, working hours, women workers, wages, labor laws, social security, small- and medium businesses, political and economic trends, international labor issues, young workers and industrial labor in Kansai region. Study teams have no specific term of work, but in principle they make public the results of their study every two years. Beside these study teams, Rodo-Soken sets up project teams in accordance with the necessity of the movement. Such project teams will dissolve on completing their investigation and study in about two years. Currently a project team on local policies is at work. All these study and project teams are composed of Rodo-Soken's individual members and trade union activists.

      Rodo-Soken comprises more than 300 individual members and 67 organization members that are affiliated with Zenroren along with industrial unions and prefectural federations under the umbrella of Zenroren. Rodo-Soken publishes a monthly newsletter "Rodo-Soken News," quarterly magazine "Rodo-Soken Quarterly," and English quarterly bulletin "Rodo-Soken Journal."

      Rodo-Soken wishes to promote exchange of information, materials and opinions with study bodies and researchers all over the world. Rodo-Soken sincerely hopes that "Rodo-Soken Journal" published on its web site will be of great use for them.
      Rodo-Soken officials elected by the 2000 general meeting are:
Representative Directors: Takeshi OHE, Kazunori OHKI, and Tomio MAKINO
Administrative Director: Kazuyuki Kusajima

Characteristics of Nissan "Restructuring" and
What Trade Unions Demand

by Rodo-Soken project team on Nissan problem

Introduction: Outline of the "Revival Plan"

      Carlos Ghosn, sent by French-Renault to take hold of the real management authority of Nissan Motor Corporation, announced on October 18, 1999 a "Nissan Revival Plan" to Nissan workers all over the world via simultaneous satellite broadcasting. The plan set out a drastic restructuring program, which included 1) to dismiss 21,000 workers by 2002, 2) to close Murayama Plant and other four plants in Japan, 3) to reduce the purchase cost of parts, material and service by 20 percent, by halving the number of manufactures having business with Nissan.

      Rodo-Soken Project Team on Nissan Problem examined what impact the Ghosn Plan would have on Japan's society and economy, and set out political tasks the labor movement should tackle. The following is the summary of the work of the Project Team.

1. Social and Economic Impact and Problems of Nissan Revival Plan

(1) Inter-Industry Relations Analysis on the Impact

      Using the production-inducing efficacy according to the inter-industry relations table, we figured out what impact the Nissan Revival Plan would have on the income of the employed, domestic product and local economy. We found out that the impact would be greater than what we had expected, as indicated in the table 1 and table 2, both in the car industry (A-D), and in local economy (E, Kanagawa Prefecture).

      Let us take the case of Kanagawa Prefecture. We made a trial calculation of the impact on the local economy of Kanagawa Prefecture (E), on the assumption that 50 percent of the workers would either lose job or move out of the prefecture. The result was that the income of the employed would drop by about 72.83 billion yen; domestic product, by 145.97 billion yen; and the value added, by 67.57 billion yen. With all these, the impact rate on the total income of the employed persons would be as high as 3.5 percent.

(2) Padded Production Capacity by Largely Extended Working Hours and Personnel Downsizing

      According to the financial statement, Nissan's annual car production capacity as of March 1999 totaled 1,950,000. The company's production performance from April 1998 to March 1999 was 1,520,000, with which the capacity utilization rate would record 65 percent. The Revival Plan aims to increase Nissan's annual production capacity at a stroke to 2,400,000. To achieve such an extravagant goal, Nissan will largely extend working hours. Presently, the annual regular work hours per worker are 1,830, and capacity utilization per day by two-shift operations is 3,660 hours. By imposing on workers constant overtime work and more work on holidays, the company plans to increase the annual regular work hours to 2,200 with 4,400 hours of operation a day.

      The Revival Plan sets out a goal of producing 1,350,000 cars a year, even after closing three assembly plants including Murayama Plant. To attain this goal, it will be indispensable for the company to extend working hours not only at the surviving assembly plants, but also at sales and general affairs and even at the affiliated companies supplying parts, materials and service. Further, a substantial increase of working hours at Nissan's workplaces will lead to longer working hours for millions of workers employed by other auto makers and their subcontractors.

      As everyone knows, in France today the government is encouraging corporations including Renault, Mr. Ghosn's home company, to create jobs by cutting working hours. On the contrary, in Japan the same Renault management is trimming Nissan's workforce by increasing working hours. The National Confederation of Trade Unions (Zenroren) and JMIU (All-Japan Metal and Information Machinery Workers' Union) made a test calculation. The result shows that if Nissan gives up the working hours extension plan, it can secure jobs for 80 percent of 4000 plant workers targeted for restructuring.

(3) To Replace Regular Employees with Unstable Employment - Another Aim of the Revival Plan

      The Revival Plan says that Nissan will achieve headcount reduction through "natural attrition, an increase in part-time employment, expanding areas where flextime system is applied, spin-off of non-core businesses, and early retirement." By changing the employment system and promoting spin-offs, Nissan aims to enhance labor mobility and cut payroll expenses of 148,000 workers currently employed by the Nissan Group companies.

      In fact, in implementing the restructuring policy, Nissan is replacing regular employed workers with part-timers, so that it can trim down the labor costs by half. It also introduces the flexible working hours system, under which workers are forced to work longer hours with no overtime payment. It carries out spin-offs and encourages stay-at-home labor called SOHO (small office home-office) system, which means for workers a 50 - 60 percent wage cut and exclusion from access to social security. In this way, violation of basic legal rights of labor is frequently taking place.

      Facing such an unjustifiable way of restructuring, enactment of a "law to ban dismissals" is urgent as proposed by Zenroren. It is also important to have the Japanese government ratify two ILO Conventions: ILO Part-time Work Convention (174, 1994) and ILO Home Work Convention (177, 1996) and make necessary legislation and arrangement for national laws in accordance with the conventions.

      The ratification of these ILO conventions and related legislation being made at national level will not only help toward redressing unfair, discriminatory treatment of workers according to employment patterns, but also guarantee workers wages, social security and fundamental rights to work. Workers will have a free choice for employment and work patterns; it will be possible for them to switch from regular employment to non-regular employment, and then back to regular employment, according to their temporary conditions and limitation due to child-care and nursing care for the aged or sick family members, and so on. This at the same time will put a brake on replacement of regular workers with non-regular workers carried out by corporations as an unjustifiable restructuring measures to cut personnel costs.

2. Tasks for Defending Business and Employment of Subcontractors and Smaller Enterprises

      The Revival Plan's another key point for cost reduction is to downsize subcontractors by half, and to cut purchasing cost by 20 percent. A concrete measure to attain this target is to introduce a system of "purchasing materials and parts at the most optimal place." This world strategy will not only have a direct bearing on the survival of Nissan affiliated companies in Japan but also give a serious blow to the nation's entire car industry.

(1) "Purchasing at the Most Optimal Place" System will Dismantle Nissan's Subcontracting System to Be Reintegrated into Renault's Trading System

      Under the "purchasing materials and parts at the most optimal place" system, Nissan's subcontractors are to be selected; some survive and some discarded, while unit price are drastically lowered. Increase in business failure among subcontractors will be inevitable. With further cost reduction demanded on top of all the unit price cutting already imposed on them, those surviving subcontractors will have no choice but to intensify the labor or downsize the workforce.

      What is more, Nissan plans to sell its shareholdings of 1,394 affiliates to offset its deficit, which will undermine the affiliates' business stability. The production system of Japan's car industry has been able to provide low unit price, on-time delivery and products of high precision. The "purchasing at the most optimal place" policy will dismantle this production system.

      Renault is stepping up dismantlement and selection of Nissan affiliates, with the aim of integrating blue-chip companies into the corporate group under its control, so that it can boost its competitiveness as a transnational corporation.

      In France, Renault introduced in 1998 to its part purchasing, a system called "optima," under which Renault appoints parts manufacturers with more competitiveness than others. Renault would urge them to reduce the purchasing price, and work jointly on development and early introduction of most advanced engineering. With this system, Renault aims to tighten its relations with major parts manufacturers.

      The "optima" system has advantages: i) major parts manufacturers individually conclude an agreement with Renault on a long-term purchasing plan and those designated can participate in Renault's new model development projects; ii) parts manufacturers will be guaranteed 70 percent share in parts purchasing for new models; iii) decision on a purchasing amount cut will be made through negotiations between Renault and parts manufacturers.

      However, parts manufacturers are under obligation to stay competitive regarding cost and quality; to carry out business operations with high transparency, such as fixing delivery price with consideration given to market price; to give priority to Renault in providing the products of the advanced technology; and to cooperate with Renault's world strategy to deal with the global supply system.

      The biggest problem is that Renault is carrying out its world strategy imposing an enormous sacrifice on subcontractors and workers.

(2) Realignment Underway at the Cost of Workers and Smaller Businesses

      Realignment and tie-ups are already underway between Renault-affiliated parts manufacturers and Nissan group companies. A French corporation, Valeo, is going to buy into JATCO TransTechnology Ltd (JTT). Mr. Ghosn has expressed his willingness to introduce foreign capital, boasting that he would make JTT a parts manufacturer transacting worldwide.

      UNISIA JECS Corp. plans to establish a joint venture with Valeo that deals with production and sales of car clutches. Part of some facilities and workers of Atsugi Plant are to be transferred to a new company. With Valeo holding more than fifty percent stake in it and taking advantage of 250 UNISIA's clutch section workers, the new company intends to find a market for its products throughout the world.

      ICHIKOH Industries, LTD. is negotiating over the acquisition of Nissan stakes with Valeo, Nissan's largest shareholder with a 20.6 percent equity stake. The two companies have agreed on the whole about mutual use of their plants in Europe and Japan. They are now discussing broader business partnership, including joint material procurement and joint development of new technology. ICHIKO plans to put into operation in Taiwan a new integrated plant that produces rearview mirrors. The new plant can be converted into a factory producing small lumps. With this, ICHIKO starts to in-house molding and painting, instead of contracting these works out, so that it can boost profitability. It has also reached an agreement with Malaysia's parts manufacturer, DELLOYD Industries, Ltd. to jointly produce head lights and mirrors, and they plan to start supplying by 2001. In this way, ICHIKO is rapidly expanding its business in the Asia region.

      To help reduce Nissan's purchasing cost, JIDECO Electric Co., Ltd. plans to stop producing motors for electrical equipment at three plants in Ayase, Yokohama, and Fukushima, and set up a 100%-owned subsidiary in the Philippines. The workers at Ayase and Yokohama plants will be transferred in principle to Fukushima. JIDECO has announced that it would work out a concrete plan to shed its payroll from 2,100 to 1,400 by March 2003, which means about 700 workers will lose their jobs.

      TACHI-S Co., Ltd., a major car sheet manufacturer, will close its main plant in Akishima City, Tokyo, in two years following the closing down of Nissan's Murayama Plant. It will set up SynTec Inc., 100%-U.S. owned company. which will starts producing start integrated production of sheet for school buses. It also plans to expand production by raising its equity in Industria de Asiento Superior SA. de C.V., a joint sheet manufacturer of Nissan Mexicana. to the level of 80 percent.

      These mentioned above are only a few examples of Renault-Nissan's realignment of subcontractors. Nissan's leading subcontractors in the primary level are transferring and expanding related parts production to Asia, in accordance with Renault's world strategy. Such moves will inevitably lead to selection and reorganization of subcontractors below the secondary level. Under the "purchasing at the most optimal place" policy, subcontractors are being exposed to the global competition with developing countries supplying low-priced products. No doubt that there will be an increasing number of subcontractors in the lowest level driven into breaking off of their business relations with Nissan-Renault. More use of module plant system, above all, will push forward such a tendency.

      Japan's car industry has grown in cooperation with a great number of small- and medium-sized businesses and local economy. The "purchasing at the most optimal place" strategy will mercilessly discard these "stakeholders," representing a way of major company's abandoning of their social responsibilities.

(3) Immediate Tasks for Defending Business and Employment of Smaller Enterprises from Realignment of Car Parts Manufacturers

      In the labor-management negotiation, Nissan Motors. Co. says that it has submitted materials to the government authorities including the Labor Ministry to explain about the effects of the Revival Plan on Nissan's subcontractors, affiliates and satellite businesses. However, Nissan has refused to make the material public. It is still clear that the Revival Plan will have a grave impact directly or indirectly on Japan's small- and medium-sized businesses and workers. It is minimum social responsibility major companies must perform to release all material and data on their restructuring plans and carry out supplementary investigation. Also, the government has a grave responsibility, because it refuses to make public the material and explanation it has received from the company. The government must give a strong direction to companies to fulfill their social responsibilities.

3. Position of Japan's Car Industry and the Government's Responsibility

1) Japan's Industrial Structure and the Position of Car Industry

      Let us look at the table 3 to make clear the position of car industry in Japan's industrial structure. Japan's car industry stands out among other industries, in terms of the percentage in the total sum of import and export, the number of the employees and production value.

Government Protection for Car Industry as a Lever for Public Projects-Oriented Politics

      The Japanese government has long been taking protective and supportive measures for companies in the car industry. It has also invested enormous amount of taxpayers' money directly and indirectly in motor transportation related projects.

      The national and local government are investing a colossal amount of public money in expansion and maintenance of various road networks with purchase of lot, in construction of footbridges and overpasses, and in measures to prevent car-related pollution due to emission, noise and oscillation. The recent estimation of such "social cost" totaled more than 4.1 million yen per car.

      The background of the prosperity of Japan's car industry was a vast public investment for the benefit of major general contractor construction companies based on the long years of cozy relations between politicians, bureaucrats and financial circles. In return for Japan's car export to the United States, the Japanese government has forced through the liberalization of the import of agricultural products, which has led to the devastation of Japanese agriculture. This is another factor.

4. Immediate Demands and Tasks on Nissan Restructuring Question

(1) Demands on the Government for Job Security

1) To inhibit coercing workers without consent into shift to other assignment, transfer and move to affiliates or other firms, or retirement

      The government should give companies strong directions to control their outrageous behavior in individual interviews with workers underway in the plants that are supposed to be closed, and in dealing with group companies as well as the whole subcontractors and sales companies that will suffer the suspension of business transactions with Nissan and a considerable decrease in purchase from it.

2) To set up complaints and consultation sections for Nissan workers in municipal labor administration bodies such as labor standards inspection offices and public employment security offices, as well as in prefectural labor related bodies including labor relations offices

      Matters for consultation should be collected online, based on which the government gives guidance to Nissan head office to immediately rectify the situation disadvantageous to workers.

3) To exercise guidance to companies to comply with 1,800 annual working hours as promised by the government, instead of 2,200 hours put forward in their restructuring plan.

      Our test calculation shows that by reducing annual working hours from the present level of 1,830 to 1,800, it is possible to secure jobs for 4,000 workers in the plants to be shut down. Nissan's plan to extend working hours, which will immediately lead to longer working hours in other corporate groups and their parts and service suppliers in the car industry, should be called off without delay.

4) To control plant closure and massive dismissals by corporations with their social responsibilities made clear

      In Europe, EU Directives and national laws regulate dismissals by obligating companies to give prior notice and to have consultations with workers on dismissals, and by banning massive discharge by corporations in black. These regulations, which are in accordance with ILO conventions and recommendations, should be considered as global standards. The Japanese government should undertake necessary legal measures including review on the Employment Promotion Law.

5) To conduct a thorough investigation on the actual situation of Nissan subcontracting system to the lowest level, and to invoke the Anti-Monopoly Law, two subcontractors protection laws and others so that Nissan affiliates can be fully protected

      The Revival Plan unilaterally puts forward reduction of companies having trade with Nissan by half, and service purchasing price cut by 20 percent. Clearly, this represents unfair trade practices by the abuse of superiority. The government should investigate the reality of transaction, coercive suspension of business and unit price cut suffered by Nissan affiliated subcontractors down to the lowest level to make the results public, and redress the actual situation.

6) To disclose the whole material on Nissan restructuring submitted by Nissan Motor Co.

      In the labor-management negotiation at Murayama Plant, Nissan authorities said that the company had submitted the material on the effects of the restructuring plan on subcontractors and explained about it to the government, and that it would not make the material open to the public. In consideration of the serious effects the Nissan restructuring plan would have on employment and business of subcontractors, the government should disclose the whole material immediately.

(2) Social Responsibilities of Nissan Motor Co. should be made clear

1) Nissan must take corporate accountability to carry out investigation and make on the purchase of parts and service from subcontractors from top to bottom and make public the results.

      The realities of layered subcontractors cannot be grasped unless Nissan's main body undertake investigation through systematic instructions. Nissan should disclose all data on items, amount, value and their percentages of parts and service purchase from subcontractors at all levels.

2) Nissan must investigate the housing situation of workers in the surrounding areas of the plants to be closed, and the impact on nearby shops.

      Nissan workers bought land and built their houses on loan arranged through Nissan-related real estate and financing companies. The most affected by Nissan's restructuring plan are not workers but their families including children. Nissan should make their actual situation known to public.

3) Nissan must make public the whole information on closing plants regarding infrastructure development including land acquisition, road and water supply facilities, and on privilege to exempt Nissan from property and other taxes and public utility charges.

      It is well known that in constructing large-scale plant facilities in a vast area, Nissan received various tax breaks from national and local governments, in return for employment and commercial promotion of subcontractors and shopping districts in nearby areas. Plant closure will devastate them all.

(3) Legislation to actually place large corporations under democratic control

1) Enactment of a law to ban dismissals proposed by Zenroren and others

      The existing Employment Promotion Law provides that companies should submit a notification on massive dismissals. But this is only a formal procedure and in fact there is no brake on corporate restructuring. Regulations must be imposed on corporate behavior aimed at dismissals as well as relocation, transfer or shift of workers to affiliates or new firms.

2) Legislation similar to those of other countries that are based on the EU 1994 Directives on European Works Council.

      In carrying out restructuring, Nissan gave no prior notice to or made consultation with trade unions. With such legislation, workers could have blocked the unjustifiable plan that includes drastically extended working hours.

3) Ban on discriminatory working conditions according to employment and work patterns

      The ILO Conventions 175 on Part-Time Work (1994) and 177 on Home Work (1996) provide that part-time workers whose normal hours of work are less than those of comparable full-time workers, and homeworkers and those who, according to their employment patterns, are currently considered as independent workers, should be guaranteed equal treatment with full time employees with regard to basic legal rights of labor and access to social insurance. They also specify that wages and labor conditions should be the same irrespective of workers' employment patterns. Through early ratification of ILO conventions and necessary arrangement to national laws, Japan must redress unfair, discriminatory treatment of workers based on employment and work patterns.          (15 March 2000)